February 5, 2010 by Zale.

When you have been involved in an accident and your vehicle has been damaged, the question of whether or not the vehicle is a total loss often comes up. Generally the average individual has not had to deal with this situation before. Therefore, I would like to take a few moments and touch on the topic. I will refer to Tennessee law, however, many of these principles are fairly universal.

What is a “Total Loss”? It is when the value of the repairs exceeds a certain percentage of the value of the vehicle. In Tennessee there is a statue which addresses this. Tenn. Code Ann § 55-3-211(9) defines a “salvage vehicle”, which is what your damaged vehicle has now become, as:

“…any passenger motor vehicle which has been wrecked, destroyed, or damaged to the extent that the total estimated or actual cost of parts and labor to rebuild or reconstruct the passenger motor vehicle to its pre-accident condition and for legal operation on the roads or highways exceeds seventy-five percent (75%) of the retail value of the passenger motor vehicle, as set forth in a current edition of any nationally recognized compilation (to include automated databases) of retail values.”

Therefore, in my experience, the 75% mark in Tennessee is generally threshold for a total loss. For example, if you vehicle is worth $10,000 and the value of the repairs is $7,500, its a total loss.  However, I do not know of any rule preventing an insurer from using a lower threshold.

What often complicates this process is the way most vehicle damage estimates are written. Most of them are written with the anticipation that there will be at least one additional estimate written, that additional estimate is called a supplement. So, if the shop writes a $6,800 estimate for the above vehicle, it may not technically be a total loss at the time the estimate is written. This occurs because most insurance companies want their estimates to be written on “visible damage”. After the shop tears down the vehicle, that is when they can see the additional damage and the supplement is written. Therefore, just because the initial estimate says $6,800, that does not mean that that is the maximum amount of the damage to the vehicle. It just means that is the visible damage to the vehicle.  (At one time, appraisers could use their experience and common sense to write estimates of hidden damage, but rarely do companies allow them to use their common sense any more.)

Based on the above, I have seen shops write, what I thought, were intentionally low initial estimates and then issue three to four supplements after having the vehicle in the shop. Some of those vehicles might have been better off as total losses, but then the shop would not have gotten paid to fix them.

So there’s the basic concept of a total loss, which often goes unexplained to the average consumer.  If you have any questions as to a related topic, such as the evaluations run by the insurers or determining the retail or market value of your vehicle, please feel free to post a comment.

Posted in Insurance Practices, Insurance Law | No Comments »

December 17, 2009 by Zale.

Since I was an insurance adjuster for over a decade, I enjoy dealing with insurance related disputes.  They don’t come up all the time, but when they do, they can be very stressful for the client.

Here is a recent Tennessee case dealing with such a dispute.  This appears to be what’s known as a “construction defect” claim where the insurer denied coverage.  I handled a few of these.  They’re pretty complex.

In this scenario, the proper way to get the court to determine coverage is known as a Declaratory Judgment Action.  In this case, the plaintiffs made other claims like “bad faith”, “Tennessee Consumer Protection Act” and that sort of thing, but for me, the heart of this case is that the court DID GIVE THEM INSURANCE COVERAGE at the end of the day.

Posted in Litigation, Insurance Practices, Insurance Law, Business Law | No Comments »

February 27, 2009 by Zale.

In an injury case in Tennessee where there is  hospital lien, it is a big deal.  Why?  Tenn. Code Ann. §29-22-101.  It gives the hospitals a “big stick” to wield against insurance companies, specifically automobile insurance companies.

In this case,  Nationwide felt the wrath of the The Med under this statute.  The Med, who is very well informed regarding this statute, recovered their entire lien amount of $33, 823.02 when the automobile insurance policy only had $5,000 in coverage.  Trust me, that’s every adjuster’s nightmare.  When anyone recovers more than the coverage on the policy, insurance companies just come apart at the seams.

So, if you are wondering why an adjuster is more concerned about your hospital bill than any other bill, its becase of Tenn. Code Ann. §29-22-101.

Posted in Injury Law, Insurance Practices, Insurance Law | No Comments »

January 3, 2009 by Zale.

The problem is lack of consistency.  In some instances, they will offer you money on cases that you never dreamed they would.  Those are good days.  In other instances, they make terrible offers or even denials on very viable cases.

They claim that this is due to every claim being different.  I think there are more subtle reasons like:

• How well the claims staff, including the manager and claims analyst, is trained. Many people would be amazed at how poorly and inconsistently claims operations are trained.
• How much the insurance company simply wants to close claims. Insurance company “sales” are a good thing for everyone.
• Whether or not the claimant or attorney has upset the adjuster. Don’t bite the hand that you want to feed you, if at all possible.  Sometimes its just unavoidable.
• The current trend of the company or industry regarding making fair offers or making a point.  Insurance companies watch and imitate each other.  Each one goes through trends of first, “look how much we are cutting claims costs” then “we need to reduce our number of claims”. Often, they never figure out that the two are related.
  
• Whether or not the company or adjuster is seeing every single claim as fraudulent.  Which was the culture at Allstate.  Everything to them seemed to be fraud.
• Or even matters as arbitrary as whether or not its the end of the month or the end of the year.  Often this is the best time to push for the closure of a claim, since insurance companies adjust their mandated reserves at the end of each month.

So what’s my point?  If you value your claim, you’ll talk to an attorney about it, before its too late.

Posted in Negotiations, Litigation, Injury Law, Insurance Practices, Insurance Law | No Comments »

December 17, 2008 by Zale.

Insurance adjusters are hired to investigate and resolve claims on behalf of the insurance company.  If the settlement is cheap, then they have done their job.  They are not interested in the claimant’s well being or best interests.

One questionable tactic I’ve been seeing lately is the adjuster telling the claimant that the insurance company won’t consider the claim until after the first year or that the claimant has until the end of the first year to get in all their paperwork.  In Tennessee, the end of the first year means the end of the statute of limitations period.  So, by waiting the year, the claimant is now out of luck, if the claimant didn’t file a lawsuit.  (I wish I could get this statement in writing from the insurance company.  I believe that would constitute bad faith.)

So, I know that the adjuster may be nice and personable, but its for a reason.  Its to try to keep the claimant “under control” and to keep the settlement low.  I’ve never seen a low settlement be in a claimant’s best interest.

I know that there are more and more pro se cases being filed and plenty of self help solutions available.  Is it really worth it to try and handle your case on your own?  The insurance company hired and trained an adjuster to handle your claim.  Don’t you think you ought to hire someone too?

Posted in Injury Law, Insurance Practices, Insurance Law | No Comments »

October 13, 2008 by Zale.

I’m hoping that this will be a fun activity for all.  I have a pretty good number of subscribers to this blog, but I’ve not gotten many comments.  So, that tells me that I have a good number of passive readers.  Thank you to all.

Here’s where you get to participate.  What’s your question?  Surely you have to have some legal question you would like to  have addressed.  So here’s your chance.  I’ll address the questions in upcoming posts.

I look forward to hearing from you!

Posted in Criminal Law, Litigation, Negotiations, Diminished Value, Injury Law, Insurance Practices, Business Law, Right To Life, Insurance Law, General Law | No Comments »

October 6, 2008 by Zale.

Medicare has announced that it is not paying for medical errors, also known as medical malpractice.  Huh?  What happens if there is a dispute as to whether or not there was actually a medical error?  Sounds to me like the patient is going to be the loser in that battle.

I see a two pronged problem here.  I don’t believe in big government programs, so I don’t really like Medicare in the first place, BUT there are those that have come to rely on it whether or not its a good program.  So, the first problem is this big government program in which governmnet is inept at running.  The second problem here has to do with Medicare’s ability to subrogate.

Subrogation is how insurers get their money back from the liable party.  If Medicare were effective at subrogation, then they would not need to do this.  They have every advantage in the world at collecting their subrogation, and still it appears that they are ineffective.

So what we have here is a government program that is ineffective at part of what it should be able to do, so its going to push those costs off onto the patient.  Unfortunately, this is why people need their own attorney in dealing the medical malpractice.

Here’s the article if you would like to read more.

Posted in Injury Law, Insurance Practices, Insurance Law | No Comments »

September 30, 2008 by Zale.

Be careful if you do.  Here’s a recent Tennessee Court of Appeals case where Farmers asserted an exclusion against one of their policyholders.

Everyday individuals trying to make a living use their personal automobiles to conduct business.  Often, this is encouraged by their employers.  Its good for those individuals to check their insurance policy to make sure their business activities are covered.

It seems to be a fairly rare instance where the insurer for a personal auto policy asserts this type of business use exclusion, since they are usually fairly narrow exclusions.  The point of the exclusion is for the vehicle owner to get a commercial auto policy, which is designed for business use vehicle.

In this instance, the exclusion stated:  “[w]hile used in employment by any person whose primary duties are the delivery of products or services[.]”  Both the trial court and the Court of Appeals agreed with Farmers on this one and the policyholder was out of luck.

Posted in Litigation, Injury Law, Insurance Practices, Insurance Law | No Comments »

September 24, 2008 by Zale.

I noticed this recent TN bad faith case.  In short, this is one of those cases where the insured’s property burns down and the insurance company insuring the property calls the fire arson, which is not covered.

Let’s set the stage.  If you have a claim like this, one of the first people out there, other than the property adjuster, is the C & O or Cause and Origin expert.  They are there to try to figure out why this piece building, all of a sudden, decided to increase it’s output of carbon and, consequently, lower its roof line to the ground.  The adjuster is going to have the insured fill out proof of loss statements and that sort of thing.  If the insurance company suspects that the policy holder or insured intentionally set the fire, then the  insured can expect to have to sit for an Examination Under Oath, which is often followed by a denial of coverage.

Well, in this case, the jury found that they believed that the insured had made some misrepresentations as to what they had.  This happens all the time, but the stuff that was misrepresented was no where to be found in the debris. So, the court said “no coverge for you!”

What do we learn from this? Just be honest.  At the end of the day, its only money.  Is your integrity really worth trying to inflate a claim?

Posted in Litigation, Insurance Practices, Insurance Law, Business Law | No Comments »

September 18, 2008 by Zale.

This is a bit of a touchy subject with me, because I believe that the insurance companies have it all wrong.

A Diminished Value claim is simply a claim regarding property, usually a vehicle, that was damaged and has been repaired.  But it still may never have the same value as it would if it has not been damaged at all.  At one time, if the vehicle was properly repaired, then there was truly no Diminished Value.  Now we have CarFax and similar information providers.  These are great tools for buyers, but if a vehicle has been damaged in an accident, I don’t care how  well you repair it, its always going to have a CarFax notice for that accident. Therefore the value is permanently diminished.

Georgia is one of the few states that has legislated Diminished Value. (Georgia legislates a LOT anyway, so this is not too surprising.)  What’s surprising is that the insurance industry had a formula it used based on the Georgia statute.  I used this formula as an adjuster myself.  Well, it appears that the insurance industry has now run afoul of the statute.  (I know, you’re surprised.)   It seems that the insurance companies have been saying that their “formula” was approved by the Georgia Insurance Commissioner.  According to the Insurance Commissioner, that statement was not true.

You know, if insurance companies would simply be nice and give the consumer the benefit of the doubt, there wouldn’t be any need attorneys who handle insurance matters for the consumer.  But it appears that we have plenty of work to do because of them.

If you want to read more on this topic, check out this blog post.

If you have a question about a Tennessee Diminished Value claim, please feel free to contact the Dowlen Law Firm, PLLC at 615.497.0763 to discuss it.

Posted in Diminished Value, Insurance Practices, Insurance Law | 1 Comment »